The formulation of the Fourth Five-Year Environmental Action Plan (to be initiated in fiscal 2016) was started by creating a comprehensive list of major environmental actions that socially responsible businesses are expected to take. To do this, relevant standards, such as Nikkei Environmental Management Surveys, Global Reporting Initiative (GRI) Guidelines and Dow Jones Sustainability Index (DJSI), have been used for reference.
Based on the created list, priority and focus themes have been selected considering the corporate philosophy, medium- to long-term management strategies of the NGK Group and social needs. The selected themes are organized into three groups: environmental/social contribution through products, reducing CO2 emissions and discarded materials, and biodiversity conservation and water resources risk management/response.
The first priority has been given to the theme of environmental/social contribution through products, which directly reflects the core concept of the corporate philosophy, the most essential guide to the Group's entire scope of activities. Reducing CO2 emissions and discarded materials is another priority theme, as this closely relates to NGK's medium- to long-term initiative of new/reformed manufacturing structures for increasing competitiveness. Biodiversity conservation and water resources risk management/response, major issues for which socially responsible corporate action is required more urgently, have been set up as focus themes.
NGK attaches particular weight to promoting environmental contribution through products and environmentally aware manufacturing operations, based on the core concept of its corporate philosophy, summarized as products and technologies contributing to the quality of life. In the Fourth Environmental Action Plan starting fiscal 2016, the highest priority is given to the theme of developing and distributing products contributing to environmental protection, as this directly reflects the corporate philosophy, and we have set numerical targets for this theme, a new approach starting from the new Plan. We will instruct employees to increase their environmental understanding of new products under development, while working to expand sales for the existing lineup, in an effort to fulfill our commitment to helping build a sustainable society through business activities. Also, we have been engaged in reducing environmental impact over the years, focusing on slashing CO2 emissions and discarded materials, and gradually expanding the target control scope to include global group companies. In place of a separate management method previously employed for bases in and out of Japan to set different targets, starting from the new plan, we will set common goals for domestic and overseas sites to manage activities on a consolidated basis. The entire Group will work as a team aiming to achieve shared targets set at higher-than-standard levels, thereby helping decreasing environmental impact.
Among other themes included in the new Environmental Action Plan, the highest priority has been given to the development and distribution of products contributing to environmental protection. I will take particular note of this part. NGK has chosen to promote projects involving its strong products achieved via advanced ceramics technologies, such as the NAS® battery and HONEYCERAM®, as a high-materiality strategic business, which I regard as appropriately nimble to broadly publicize its commitment to contribution to environmental conservation. In addition, I am strongly intrigued by a characteristic common to these products: essentially, many of these technologies demonstrate their potential function of environmental contribution only in combination with other technologies. For instance, the NAS battery can serve this purpose by supporting stable supply of renewable energy power, and diesel particulate filters (DPFs) by improving the environmental performance of diesel vehicles. The behind-the-scene capability of these technologies, playing a vital but low-profile role in building society, dates back to NGK's founding business that has helped social development over the years by supplying unrivaled high-quality insulators to support power supply infrastructure building. Throughout its long history, NGK has maintained this stance of supporting and improving pioneering technologies, contributing to the sound development of society and enhancement of people's life through business, thereby achieving sustainable growth. I see this aspect of the company as providing inspiring insights, and expect to see significant achievements from their efforts over the coming five years under the Action Plan.
Under the new Five-Year Environmental Action Plan, NGK is committed to two priority themes: environmental/social contribution through products and global environmental impact reduction (reducing CO2 emissions and discarded materials). For each theme, effective and specific, above-standard level targets have been set to correspond with relevant business initiatives. In addition, we have drawn up plans to promote two focus themes. For biodiversity conservation, activity content and opportunities will be enhanced, and in the water resources area, risk assessment activities will be continued and initiatives for efficient water usage will be expanded within the Group.
*Reduction from BAU (business as usual) indicates the percentage rate of emissions reduction resulting from implemented actions against a computed value for the hypothetical absence of the actions. By not including the influence of foreign exchange movements and other factors, this indicator allows a direct grasp of the efforts by each site.
The new Five-Year Environmental Action Plan has been designed to correspond with the business initiative of new/reformed manufacturing structures. Accordingly, the base year and target year of the Plan have been set to coincide with the initiative. In principle, activities will be managed on a consolidated basis, embracing those based in and outside of Japan, in place of the previous method of managing domestic and overseas activities separately. The consolidation method has been adopted to improve management efficiency and effectiveness in response to the recent changes in our global production output structure, particularly increased amounts from overseas manufacturing sites as well as from production chains through multiple global locations.